MAPUTO, May 23 (Xinhua) -- The Mozambican government will subsidize the purchase of cotton by five meticais (about 7.9 U.S. cents) a kilogram in a bid to stabilize the prices and benefit 600,000 farmers.

The announcement was made Wednesday by Minister of Agriculture and Rural Development Celso Correia, during a meeting with producers in Maputo.

The subsidy and price stabilization will impact around 100,000 families, representing a total of 600,000 people who will have their income stabilized, the minister said.

The meeting was attended by representatives of the National Cotton Producers Forum (FONPA) and the Cotton Association of Mozambique (AAM), as part of a platform negotiating proposals for the minimum price of seed cotton and the ginning fee, based on an approved calculation mechanism.

For the 2023-2024 campaign, the minimum price was set at 30 meticais per kilogram of cotton, including the government subsidy, compared to 33 meticais and a subsidy of seven meticais in the previous campaign.

The lack of rain, mainly due to the El Nino phenomenon, the continued abandonment of production in Cabo Delgado province, and the excess production of cotton on the market have put downward pressure on prices, according to the minister.

"There is global pressure from countries with subsidies, which is driving down the price of cotton. We're producing a lot of cotton; stocks are rising," Celso Correia said.

Mozambique accounts for less than 0.5 percent of world cotton production, in a market led by countries like India, China and the United States.

Cotton in Mozambique has generated between 30 million and 50 million dollars in annual exports over the last 10 years, according to data made available at the meeting. Enditem

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